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Averting DIY Disaster: Beware the “Ikea Effect”

Averting DIY Disaster: Beware the “Ikea Effect”

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Making something with your own hands instills a certain pride: No matter how crappy that table is, it’s your table, and it’s special, damn it! But what happens when that same mindset takes place in a business? New research, published in Harvard Business Review‘s yearly Breakthrough Ideas issue, suggests that the “I Made It” syndrome misdirects companies, causing them to overvalue their internal creations and undervalue superior, outside innovations.

Three professors—including Dan Ariely, a behavioral economist and author of Predictably Irrational, who’s presenting at TED this week–tasked their test subjects with creating origami. Then they asked everyone to bid on their creations, alongside others. People consistently bid more for their own creations–sometimes more than those made by experts.

The study’s authors call that the “Ikea effect,” after the idea that people are more attached to products they’ve had a hand in making. They suggest that including DIY elements in product design could foster higher customer value, within limits. The Ikea effect fades when a task is too hard, and unlikely to be completed. But for organizations, the study poses a warning: Ideas with personal investment might motivate people, but that investment is double-edged, leading some companies—Detroit, that’s you—down blind alleys.

[Via HBR]

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